Random Thoughts 38

Corbis has licensed one of Chuck O'Rear's commercial images for $135,000. The name of theclient, and the subject of the image can not be disclosed due to a confidentialityagreement, but in all likelihood we will begin seeing some image used very frequently in thenear future.

O'Rear's has one of the 40% contract's that were given to WestLight photographers whenCorbis acquired WestLight. Thus, O'Rear received $54,000 of this sale. Corbis did fly O'Rearto Seattle to pick up the money.

We are also told that the image was originally found by the customer on the Corbis web sitewithout any help from a researcher. Corbis points out that this in no way diminishes thevalue that their 70 researchers bring to the table, but points out that the web site earnsits keep as mell.

The only image I am aware of that sold for more than this amount was Dirck Halstead'spicture of Monica and Bill Clinton hugging on the White House lawn. According to sourcesthis picture went for $150,000 for one year unlimited worldwide right. Will O'Rear's pictureget the kind of exposure that was accorded Monica and Bill?

Corbis Digital Stock Layoffs

Rick Becker-Leckrone, Director of RF Production, will be leaving Corbis effective October30, 2001. His position has been eliminated.

His departure is continuing evidence of radical changes in how RF images are planned,produced and promoted. Some photographers have called him the Gandhi of RF.

Lawrence Manning was also laid off. Corbis says, "Rick's and Lawrence's positions have beeneliminated. These changes were prompted in part by the integration of the Corbis StockMarket editing team, and do not reflect any changes in our RF strategy." Corbis has combinedthe rights-protected editing and production teams to add efficiency, since many of theirphotographers shoot both RF and RP imagery.

(Note: This is good news for Stock Market photographers because it is solid evidence thatCorbis not only intends to keep the TSM editing and production team together, but expand itsresponsibilities.)

Rick and Lawrence will continue to work for Corbis as contract photographers. Corbis says,"Both Lawrence and Rick will enjoy our full support as they shoot for Corbis."

Royalty Free Image Sells For $17,000

Corbis has licensed the rights to a Royalty Free image for a royalty of $17,000. It isbelieved that the customer wanted to use the image and wanted pulled from futuredistribution. It is believed that the image was removed from the site and this satisfied thecustomer. Sources indicate that the image had been sold earlier to several other customersand may be used again by any of these customers.

Getty Scanning Update

This is an update of Story 422 .We have learned that Getty's scanning operation in Londonhas four retouching workstations - the scanning is done by others - working three shifts.Each person cleans and color corrects about 25 images per shift. This would meanthat in a 260 work day year, they would scan close to 78,000 images. The images are scannedto file sizes between 48MB and 60MB.

This is more than twice the productivity of the Seattle operation, which is certainly oneobvious reason for closing the Seattle operation. Sources indicate that the reason London isable to be so productive is that they do minimal spotting of the images and much less colorcorrection than was being done in Seattle. It has also been confirmed that they often scandupes instead of always scanning originals, as was the policy in Seattle.

In addition salaries in the UK seems to range from about $26,000 to $35,000 (in U.S.dollars) which is somewhat lower than the salaries in Seattle.

It would seem that London could easily add more scanners and retouchers to compensate forthe lost capacity in Seattle. However, indications are that they do not plan to take on morestaff. In fact, they may even cut back on the staff they already have. We are told that themanagers feel they can increase their output by simply expecting more of their employees andgetting rid of those who don't perform.

Photographers need to carefully consider how this is likely to play out in terms of gettingtheir new images scanned and up online.

German Disaster

Photographers and stock agencies who had pictures with the German agency Bavaria at the timeit was acquired by Getty Images are no longer being paid for the use of their images.Bavaria was part of VCG which Getty purchased in March 2000.

Getty fired the entire Bavaria staff in October of 2000. In addition many other Gettyemployees in Germany left Getty of their own will as they observed the non-professionalsituation that was developing. At about that time they closed the Stone offices in Hamburgand Dusseldorf and began concentrating all their German operations in the Munich in the oldBavaria Bildagentur headquarters. It appears that as part of this consolidation, they havelost track of which Bavaria images they are selling and to which creators they owe money.

In some cases when customers call requesting images they are told that Getty no longerrepresents those images. However the companies and individuals who supplied images toBavaria have never been informed that Getty was no longer representing their work. In effectGetty has taken the images off the market without giving the images suppliers a chance tomake new arrangements to offer their images to German buyers.

In other cases, image suppliers are aware that their images have been used in Germany in2001, but have received no sales reports or payments for these uses.

We know of agencies that earned in excess of $100,000 in 2000 from catalogs that wererepresented by Bavaria. These catalogs are still in the hands of buyers, but the agencieshave received no payment whatsoever in 2001, despite evidence that their images are beingused by major advertising customers in Germany. We know of photographers who has salesstatements indicating they are owed more than $5,000 who have not been paid in months. Inaddition these photographers can not find anyone at Getty who knows anything about thesituation, or will answer their phone calls.

Buyers In The World

I've been asked how many photo buyers there are in the world. It is not an easy question,but here are some numbers to consider.

Getty says they have over 1 million registered users of their site who are, in theory, photobuyers. A lot of these names may come from their EyeWire division which was mailing 800,000catalogs a month before they were purchased. Of these 800,000 they had 375,000 who hadpurchased something and another 125,000 who had requested information at one time, but notyet purchased. Keep in mind that while EyeWire has a strong offering of RF photography theyalso sell type fonts to graphic designers and software like Adobe Photoshop. Were all these375,000 photo buyers? I don't know. Also keep in mind that most of EyeWire's list was fromNorth America, not the rest of the world.

When we talk about print catalog distribution, it is generally assumed that the universe ofprofessional buyers in North America is in the range of 30,000 to 40,000. This is the numberof buyers most big catalog distributors are mailing to. The total print catalog distributionin the rest of the world is generally about another 60,000 although The Image Bank sometimesdistributed as many as 250,000 to 300,000 print catalogs worldwide. However, the TIB figuresare somewhat questionable as we know that art directors would sometimes receive as many asthree or four of the same book as a result of their names appearing on several differentlists that TIB used.

The other big question is how to count people on the low end who don't buy very much, orvery often. Consider the person who prints a small newsletter, or does a small web site.This person buys one RF photo in a year for $35. They use the picture over and over in theirmasthead, but they don't need photos for any other purpose. Is this person a photo buyer? Isthis person someone you will aggressively pursue with marketing?

One of the problems is coming up with a list of those who buy frequently enough to justifythe expense of marketing.

Online Usage In The U.S.

In 2000 Getty had $165 million in e-commerce sales. I estimate that Corbis had about $80million because they are so totally focused on e-commerce selling. I think these numberswill remain about the same for 2001. Of this $245 million of the two combined, I estimatethat at least 80% was in the U.S., or $196 million. At the present moment neither company isset up to use online marketing effectively internationally. This may change dramatically inOctober when Getty launches a multi-language site, but the big question is whether theEuropean buyers are ready to make full use of such a site.

Add to this $196 million about $16 million in sales by PictureQuest, $6 million forMasterfile, and maybe $5 million for Index Stock. Other significant contributors would beSuperStock and Sheldon Marshall's Image State, but I don't have a good handle on what theirsales might be. Also there are about 20 agencies that have individual sites using ProStocksoftware and some of them are making a significant percentage of their sales as a result ofweb search. And finally there are a number of agencies using their own custom software. For all these other agencies (not counting Getty, Corbis, PictureQuest,Masterfile and Index Stock), I would estimate an additional $25 million in gross sales. Thisgives a total of $248 million resulting from web search in the U.S. I have previouslyestimated U.S. sales in 2000 at about $673 million and that about 37% of the revenuegenerated resulted from images being found on the web.

Keep in mind that this is not full e-commerce. I estimate that no more than 20% of thesesales are paid for online with a credit card, and a huge percentage of those sales are forRoyalty Free images. Most of the Rights Protected uses are still negotiated and billed tothe customers. Also, even when the customer uses online to find the image they want, oftenthere is analog delivery of the image.

Stephen Mayes

Stephen Mayes left Photonica in July and is now Group Creative Director of eyestorm,(www.eyestorm.com) an art media company. eyestorm's vision is to make artworks byestablished artists available to a global audience.

Mayes was Senior VP of Creative with Getty Images for three years and spent three years withPhotonica - most recently as CEO amana america inc. He feels the opportunity to move intothe art world offers another learning experience and a fresh set of challenges. He has also worked in the documentary world as Director of Network Photographers for one ofthe UK's leading reportage agency, and chaired the jury of the World Press Photo during thattime.

eyestorm currently specializes in the on-line sale of limited edition prints by such artistsas Helmut Newton, Richard Misrach, William Eggleston, Sabastiao Salgado, Damien Hirst, DavidHockney and Magnum Photographers (in total, 120 artists). Mayes will be working witheyestorm's worldwide team to develop new outlets and new ways of working with this richtalent in a relatively undeveloped market.

Video Clips

According to TrendWatch about 8% of Internet creatives plan to purchase stock video clipsthis year. However, as many as 25% or the Internet creatives who work for ad agencies intendto purchase stock video.

Slowly but surely digital video is creeping into creatives' repertoires, and islands ofopportunity are popping up. Increased bandwidth, coupled with heightened interest fromclients are making digital and especially streaming video more inviting prospects. Not onlywill the need for stock video clips increase, but so, too, will the need for original video.

Feedback:

Getty's French operation is experiencing the same "troubles" as Germany.Since the take over of PIX, the French subsidiary of VCG, sales are down 40%. Some photographers of PIX and TIB France have not been paid for more than a year.

I've been represented by Bavaria for many years. After their takeover we havemutually agreed to terminate our relationship and they have said that they will return allmy material - this was perhaps a year ago. Nothing has been returned so far, and now theyare not answering any of my communication attempts. They seem to continue selling some ofmy material, and I've been receiving sales statements and payments on time. The sales areperhaps 20% of what they are used to be before the takeover. I have no idea of what toexpect and how to proceed. It would be very interesting to hear from other photographers ina similar situation!

Jim Pickerell is founder of www.selling-stock.com, an online newsletter that publishes daily. He is also available for personal telephone consultations on pricing and other matters related to stock photography. He occasionally acts as an expert witness on matters related to stock photography. For his current curriculum vitae go to: http://www.jimpickerell.com/Curriculum-Vitae.aspx.

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